Transportation Infrastructure: Impacts of Utility Relocations on Highway
and Bridge Projects (Letter Report, 06/09/1999, GAO/RCED-99-131).

Work on highway and bridge projects often involves relocating utility
lines and facilities that distribute or transmit communications,
electricity, natural gas, water, and sewage. Schedule slippages and
higher costs associated with these construction projects may result when
these lines and facilities are not relocated in a timely manner. This
report provides information on the impact that delays in relocating
utilities are having on the delivery and the cost of federal-aid highway
and bridge projects.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-99-131
     TITLE:  Transportation Infrastructure: Impacts of Utility
	     Relocations on Highway and Bridge Projects
      DATE:  06/09/1999
   SUBJECT:  Schedule slippages
	     Road construction
	     Highway engineering
	     Public roads or highways
	     Public utilities
	     Cost overruns
	     Construction contracts
	     Bridges
	     Highway planning
	     Facility transfer

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    United States General Accounting Office GAO                Report
    to Congressional Requesters June 1999          TRANSPORTATION
    INFRASTRUCTURE Impacts of Utility Relocations on Highway and
    Bridge Projects GAO/RCED-99-131 GAO    United States General
    Accounting Office Washington, D.C. 20548 Resources, Community, and
    Economic Development Division B-280707 June 9, 1999 The Honorable
    John H. Chafee Chairman The Honorable Max S. Baucus Ranking
    Minority Member Committee on Environment and Public Works United
    States Senate The Honorable Bud Shuster Chairman The Honorable
    James L. Oberstar Ranking Democratic Member Committee on
    Transportation and Infrastructure House of Representatives Work on
    highway and bridge projects often involves relocating utility
    lines and facilities that are used in producing, transmitting, or
    distributing communications, electricity, natural gas, water, and
    sewage. Schedule slippages and increased costs associated with the
    construction of these projects may result when these lines and
    facilities are not relocated in a timely manner. In this regard,
    the Transportation Equity Act for the 21st Century (TEA-21)
    directed us to assess the impact that delays in relocating
    utilities are having on the delivery and cost of federal-aid
    highway and bridge projects. As agreed with your offices, we
    examined the following for fiscal years 1997-98: (1) the extent to
    which states are experiencing such delays and the causes and
    impacts of the delays; (2) the number of states that are
    compensating construction contractors for the added costs incurred
    on their projects because of untimely relocations by utility
    companies; (3) the available technologies, such as subsurface
    utility engineering (SUE),1 that are being used during project
    design to reduce the number or impact of utility relocation
    delays; and (4) the mitigation methods that states are using, such
    as incentives, penalties, and litigation, to encourage or compel
    cooperation by utility companies that are relocating utilities on
    federal-aid highway and bridge projects. To obtain information
    about these issues, we sent a questionnaire to the departments of
    transportation of the 50 states and the District of Columbia-for
    which we achieved a 100-percent 1SUE is an engineering process
    that incorporates new and existing technologies to identify and
    map underground utilities during the early development of a
    highway project. Page 1
    GAO/RCED-99-131 Utility Relocations B-280707 response rate. A
    summary of the responses is in appendix I.2 We obtained additional
    information through interviews with officials of the headquarters
    and field offices of the U.S. Department of Transportation's
    Federal Highway Administration (FHWA), state transportation
    departments, construction contractors, and/or utility companies in
    nine states. Additional information on our scope and methodology
    is discussed later in this report. Results in Brief    The extent
    of the delays on highway and bridge projects because of relocating
    utilities ranged from none in three states to all projects in one
    state during fiscal years 1997-98. The states that reported the
    delays cited a variety of reasons for them, such as short time
    frames for planning and designing projects, the utility companies'
    lack of resources to perform relocation work, and the poor timing,
    sequencing, and coordination of the relocation work relative to
    the construction work. Only 10 states thought that the delays had
    a great or very great impact on the costs and/or construction
    schedules of federal-aid highway and bridge projects. States,
    however, are not always aware of all the delays that occur. The
    information that states have largely depends on the degree to
    which individual construction contractors request schedule
    extensions and/or submit claims for increased costs on delayed
    projects. Rather than requesting extensions or submitting claims,
    some contractors told us that they accommodate the delays by
    shifting work crews and equipment to other segments of the project
    or to another ongoing project. Forty-four states compensated
    contractors for utility relocation delays by extending project
    completion schedules, and 30 paid contractors' claims for
    increased costs. Some contractors told us that while some direct-
    cost increases resulting from delays can be recovered in their
    respective states, either (1) they usually do not have the time to
    prepare the paperwork or (2) the expected reimbursementalong with
    its timingis simply not worth the effort to prepare the paperwork.
    Other contractors told us that certain states require contractors
    to assume full financial responsibility for utility relocation
    delays. Forty-three states reported that they used computer-aided
    design and drafting systems during the project design phase of
    more than half of their projects. Such systems use computer
    graphics technologies for designing and mapping construction
    projects, including locating utilities. Although 2For statistical
    purposes, in compiling and analyzing the questionnaire responses,
    we included the District of Columbia as a state. Page 2
    GAO/RCED-99-131 Utility Relocations B-280707 the Federal Highway
    Administration recommends subsurface utility engineering as a
    means of using new and existing technologies to accurately
    identify, characterize, and map underground utilities, only seven
    states responded that they used this engineering process on half
    or more of their projects. However, it is unknown whether the use
    of subsurface utility engineering has reduced the extent of
    utility relocations or delays. Forty-one states responded that
    they used early planning and coordination and 33 responded that
    they used special contracting methods as a means to help mitigate
    the impact of utility relocation delays. This contrasts with the
    number of states that responded that they used more forceful
    mitigation measures to encourage or compel utility companies to
    complete utility relocations in a timely manner-three states
    responded that they used monetary incentives, seven used monetary
    penalties, and two used the courts. Background    To accommodate
    highway and bridge construction, utilities often must relocate
    their lines and facilities when they lie in the path of a
    construction project. Utility relocations are more prevalent today
    than in the past because most current federal-aid roadwork
    involves the reconstruction or expansion of existing highways and
    bridges (with accompanying utility lines and facilities that
    already exist) rather than new construction. Federal-aid highway
    and bridge programs, administered at the federal level by FHWA,
    provide states with financial assistance for various types of
    projects. The projects under these programs are financed generally
    on an 80-percent-federal, 20-percent-state basis-although the
    split in percentage varies, depending upon the specific highway or
    bridge program. In fiscal years 1997-98, about $21 billion a year
    in federal funds was obligated for highway and bridge projects.
    Under TEA-21, the estimated funding for fiscal year 1999 increased
    to about $26.6 billion and to about $28.3 billion for fiscal year
    2000. Along with the increased funding, an increased number of
    projects involving the relocation of utilities is expected. At the
    state level, state transportation departments generally administer
    federal-aid highway and bridge projects. States are responsible
    for planning, designing, and-with their contractors-constructing
    highway and bridge projects, while utilities are usually
    responsible for relocating their lines and facilities out of the
    path of the highway or bridge construction. States often inform
    utility companies of planned highway and bridge projects up to 5
    years before construction begins. With an early Page 3
    GAO/RCED-99-131 Utility Relocations B-280707 alert, utilities can
    begin their own conceptual designs for relocating their lines and
    facilities in concert with the planned projects. During predesign
    meetings between the project designer and the utility
    representatives, the utilities learn about upcoming highway and
    bridge projects, as well as probable construction time frames.
    Even under the best of circumstances, the planning and designing
    of highway and bridge projects often take a long time, and
    frequently involve delays, cancellations, changes in alignment,
    and other factors that can alter the involvement of utility
    companies. These conditions encourage highway agencies to wait
    until later in the design process to involve the utilities.
    Similarly, utility companies prefer to wait until they are certain
    that the project's planning and design are firm before they begin
    their relocation work. Construction contractors and utilities need
    to schedule their respective work so that their activities are
    properly sequenced. Before utility companies can relocate their
    lines and facilities, they must have the right-of-way to the
    locations where the utilities are to be moved, and those sites
    need to be cleared and graded.3 To varying degrees among states
    and individual projects, the site preparation work is performed by
    the construction contractor, the utility company, or a separate
    contractor. Once the site is cleared, the utilities can install
    their conduits, ducts, or poles and connect their lines and
    facilities at the new location. However, if a utility does not
    have the needed right-of-way or the site is not cleared or graded,
    a utility company's relocation work would likely be delayed. If
    for these, or any other reasons, a utility does not relocate its
    lines or facilities as scheduled, the construction contractor's
    schedule can be delayed. Extent, Causes, and               During
    fiscal years 1997-98, about half of all federal-aid highway and 4
    Impacts of Delays                 bridge projects involved the
    relocation of utilities.  States' responses to our questionnaire
    varied widely-from no delays resulting from utility Resulting From
    Utility relocations in three states to delays on all projects
    involving the relocation Relocations                       of
    utilities in one state. However, the full extent of the delays on
    federal-aid highway and bridge projects caused by relocating
    utilities is not known because states are not always aware of the
    delays. The states provided us with a number of reasons for the
    delays, such as the following: short time frames for states to
    plan and design projects, which affect all 3Right-of-way is a
    general term denoting real property, or an interest therein,
    usually in a strip, acquired for or devoted to transportation
    purposes. 4Based on the numbers of advertised projects in the
    states' responses to GAO's questionnaire. Page 4
    GAO/RCED-99-131 Utility Relocations B-280707 subsequent aspects of
    a project, including utility relocations; utility companies'
    limited resources to perform an expanding amount of relocation
    work; and the poor timing, sequencing, and coordination of the
    utility relocation and construction work. States generally did not
    perceive that the delays have had a great impact on the costs and
    construction schedules of federal-aid highway and bridge projects.
    States Indicated That         Forty-two states responded to our
    questionnaire on the percentage of Projects Were Delayed, but
    delays caused by the relocation of utilities on federal-aid
    highway and the Full Extent Is Not        bridge projects in their
    respective state for fiscal years 1997-98. The extent Known
    of these delays ranged widely among the states-from none reported
    by Montana, North Dakota, and Vermont to about 95 percent of the
    completed projects involving utility relocations in Idaho and to
    100 percent of such projects in Rhode Island. We found that 20
    states reported delays for 0-10 percent of their projects, 8 for
    11-20 percent, 6 for 21-30 percent, and 8 for above 30 percent.
    Nine states did not provide an estimate. Figure 1 shows the extent
    of the delays reported for each state. Page 5
    GAO/RCED-99-131 Utility Relocations B-280707 Figure 1: States'
    Responses Regarding Percentages of Federal-Aid Projects Involving
    Utility Relocations That Were Delayed, Fiscal Years 1997-98 WA MT
    ME ND OR
    MN
    VT ID
    NH SD                                  WI
    NY           MA WY
    MI                                           CT           RI IA
    PA NV                                                NE
    NJ OH                       MD                        DE UT
    IL    IN
    DC CO
    WV CA
    KS
    VA MO                       KY NC AZ
    TN OK NM                                                     AR
    SC MS    AL            GA TX                           LA FL AK HI
    0-10 percent 11-20 percent 21-30 percent Above 30 percent No
    estimate provided Source: GAO's analysis of states' responses to
    GAO's questionnaire. Page 6
    GAO/RCED-99-131 Utility Relocations B-280707 Although 20 states
    reported that about 10 percent or less of the federal-aid highway
    and bridge projects involving the relocations of utilities
    encountered delays because of these relocations, this does not
    necessarily indicate the full extent of the delays. For example,
    although Connecticut reported that only about 3 percent of its
    projects involving utility relocations had delays caused by the
    need to relocate utilities, a state transportation official told
    us that Connecticut does not keep track of all the delays caused
    by utility relocations. This official stated that the 3-percent
    figure, which the state reported, represents the state's federal-
    aid highway and bridge projects involving documented delays in
    relocating utilities. Therefore, if delays were not documented,
    they were not included in the state's response. A contractor
    association official in Connecticut told us that the state has no
    good indicators of the frequency and magnitude of delays caused by
    utility relocations. One contractor pointed out that because
    Connecticut does not reimburse contractors for the cost increases
    resulting from delays in relocating utilities, the costs of such
    delays are often anticipated and incorporated somewhere in a given
    contractor's bid. As such, the costs of these delays go
    unreported. States Gave Various    The reasons that states gave
    for delays caused by utility relocations were Reasons for Delays
    related but varied. Table 1 shows the reasons most frequently
    indicated for such delays and lists them according to the number
    of states that considered them to be a moderate or major reason
    for delays. Page 7
    GAO/RCED-99-131 Utility Relocations B-280707 Table 1: States'
    Responses Identifying Reasons for Delays in Relocating
    Reason
    Number of states Utilities                                 Utility
    lacked resources
    34 Short time frame for state to plan and design
    33 project Utilities gave low priority to relocations
    28 Increased workload on utility relocation
    28 crews because highway/bridge construction had increased Delays
    in starting utility relocation work:
    28 some utilities would not start until construction contract was
    advertised or let Phasing of construction and utility relocation
    26 work out of sequence Inaccurate locating and marking of
    existing                                          23 utility
    facilities Delays in obtaining rights-of-way for utilities
    23 Shortages of labor and equipment for utility
    19 contractor Project design changes required changes to
    19 utility relocation designs Utilities were slow in responding to
    16 contractors' requests to locate and mark underground utilities
    Inadequate coordination or sequencing
    13 among utilities using common poles/ducts Source: States'
    responses to GAO's questionnaire. As the table shows, one of the
    most prevalent reasons cited by the states was the short time
    frame for them to plan and design projects, which can affect all
    subsequent aspects of the project, including utility relocations.
    With recent increases in the federal funding of highway and bridge
    projects, states are planning and designing an increasing number
    of projects in a shorter amount of time. For example, Colorado
    told us that Page 8
    GAO/RCED-99-131 Utility Relocations B-280707 its highway
    construction program had nearly doubled since 1995 and that, in
    its rush to get projects under contract, time had become a
    shrinking resource-particularly the time available for planning
    and designing projects and the time available for designing and
    relocating utility lines and facilities. Shorter time frames for
    planning and designing construction projects also reduce the
    amount of time available to acquire needed utility rights-of-way.
    When utility facilities are located on a state's rights-of-way and
    those existing rights-of-way are not sufficient to accommodate a
    planned utility relocation, additional rights-of-way need to be
    acquired. Utilities are generally responsible for acquiring
    additional rights-of-way that may be needed for a given project.
    In some instances, the utilities may already have the necessary
    rights-of-way prior to the construction of the highway and/or
    bridge project (known as "prior rights"). If the utility has prior
    rights, the state usually pays for any additional rights-of-way
    that may be needed, as well as for the relocation itself. Because
    utilities cannot relocate their facilities unless they have the
    right-of-way for the new location, delays in obtaining rights-of-
    way can, in turn, slow the timing of relocation work. Utility
    relocations for large highway and bridge construction projects can
    be very complicated. In addition to the state transportation
    department and its construction contractors, multiple utilities
    also may be involved. To reduce scheduling problems, the
    contractors would prefer that, to the extent possible, all utility
    relocation work be finished before the highway or bridge
    construction begins. Preconstruction conferences involving all the
    parties to the project provide an opportunity for the state agency
    and the utility companies to communicate any final changes in
    project schedules, jointly review and approve final sets of plans,
    and identify key points of contact for the project. The
    conferences also provide an opportunity for the contractors and
    utilities to agree upon work schedules that will minimize possible
    conflicts during construction. Several contractor officials told
    us that the work schedules that the utilities provide at
    preconstruction conferences are often not specific or reliable.
    Contractor officials also stated that utilities are often
    unresponsive to contractors' requests for needed actions.
    Contractor and state highway officials pointed out, however, that
    utilities are not solely to blame for all delays associated with
    relocating utilities. In this regard, utility company officials
    told us that (1) contractors often make changes to construction
    work schedules, (2) they have limited resources to respond Page 9
    GAO/RCED-99-131 Utility Relocations B-280707 to contractors'
    requests, and (3) their first obligation is in servicing their
    existing and new customers. Furthermore, even when reimbursed by a
    state, utility companies do not profit from relocation work and
    generally do not recover all of their indirect costs. Impacts of
    Delays Vary    As with the extent of delays, quantifiable
    information on the full impact of delays caused by relocating
    utilities on the cost and delivery of federal-aid highway and
    bridge projects does not exist. Delays in relocating utilities can
    cause construction work to be rescheduled or delayed, or result in
    contractor claims or litigation. In addition, less tangible
    impacts result. For example, safety concerns, such as leaving
    excavations open while conflicts are resolved, increase the risk
    to state agencies, contractors, utility companies, and the
    traveling public. Furthermore, public travel on highways under
    construction is more time-consuming and less convenient. Five
    states responded that delays caused by relocating utilities had a
    great or very great impact on the construction schedules of
    federal-aid highway and bridge projects. Five states responded
    that these delays greatly or very greatly increased the
    construction costs to the state, two states responded that they
    greatly increased the costs to construction contractors, and two
    states responded that they greatly or very greatly increased the
    costs to other utility companies. In addition one state, New
    Mexico, reported that delays greatly affected utility coordination
    efforts on other projects. The states responding that the delays
    had a great impact on the projects' schedule and/or costs for
    fiscal years 1997-98 are shown in figure 2. Page 10
    GAO/RCED-99-131 Utility Relocations B-280707 Figure 2: States
    Reporting Great or Very Great Impacts From Delays Caused by
    Relocating Utilities, Fiscal Years 1997-98 U S S
    S S C U S C Increased length of project construction schedule S
    Increased construction costs to state C    Increased costs to
    construction contractors U    Increased costs to other utilities
    Source: States' responses to GAO's questionnaire. Page 11
    GAO/RCED-99-131 Utility Relocations B-280707 Although, as
    indicated by figure 2, most states did not report that delays
    caused by relocating utilities had a great impact on the
    construction schedules and costs of federal-aid highway and bridge
    projects, officials of one national contractor association and
    several contractor companies told us that states are not fully
    aware of the increased costs borne by contractors because of these
    delays. This is because many states do not reimburse their
    contractors for the costs resulting from delays caused by
    relocating utilities and, therefore, the documentation supporting
    the full impacts of delays is not sent to the states. Even in one
    state that provides reimbursements, Rhode Island, four contractors
    that we met with told us that, rather than take the time to gather
    the documentation and submit a claim to the state, they find it
    easier to either absorb the increased costs or simply factor an
    estimate of such costs into their contract bids. State and
    contractor officials told us that contractors can lessen the
    impact of some relocation delays by shifting their work crews to
    other segments of the delayed project, or to entirely different
    projects until the delayed work can be resumed. To illustrate,
    Idaho reported that about 95 percent of its projects had been
    affected by delays in relocating utilities. Such delays caused the
    respective contractors to shift work crews and adjust their
    schedules; thus, only about 6 percent of Idaho's projects actually
    resulted in contractual change orders or claims. States'
    Compensation    States can compensate contractors for delays
    caused by relocating utilities of Contractors          by
    extending project completion schedules and/or paying contractors'
    claims for increased costs. Claims due to delays in relocating
    utilities may be included in the federal share of project costs
    provided to states.5 However, it must first be determined that (1)
    the utilities were relocated prior to advertising for bids, or
    necessary coordination was arranged with the utility company to
    avoid delaying the contractor, (2) approved state procedures were
    followed, (3) construction work was delayed by the utility company
    through no fault of the construction contractor, and (4) the state
    exercised reasonable efforts to control the situation. Some
    contractors in states that reimburse contractors for direct cost
    increases resulting from delays told us that they usually do not
    have the time to prepare the paperwork or that the expected
    reimbursement-along with its timing-is simply not worth the effort
    to prepare the paperwork. Other contractors told us that certain
    states require contractors to assume full financial responsibility
    for delays caused by relocating utilities. 5See Program Guide,
    Utility Adjustments and Accommodation on Federal-Aid Highway
    Projects, fourth edition, Federal Highway Administration, U.S.
    Department of Transportation (Mar. 1998). Page 12
    GAO/RCED-99-131 Utility Relocations B-280707 Twenty-nine states
    responded that they provided both project time extensions and
    reimbursements to contractors for cost increases resulting from
    delays in relocating utilities in fiscal years 1997-98, 15 states
    provided only time extensions, 1 provided only cost reimbursement,
    5 provided neither, and 1 responded that it did not know if it
    gave time extensions but it did not provide cost reimbursements.
    The states responding that they provided project time extensions
    and/or reimbursed contractors for cost increases in fiscal years
    1997-98 are shown in figure 3. Page 13
    GAO/RCED-99-131 Utility Relocations B-280707 Figure 3: States'
    Responses Concerning Compensation of Contractors for Delays Caused
    by Relocating Utilities, Fiscal Years 1997-98 Project time
    extensions Reimbursed contractors' cost increases Source: States'
    responses to GAO's questionnaire. Page 14
    GAO/RCED-99-131 Utility Relocations B-280707 Thirty-three of the
    44 states shown in figure 3 reported that in fiscal years 1997-98,
    they granted time extensions for delays caused by relocating
    utilities that ranged from 1 to 912 days. Eleven of the 30 states
    that compensated contractors for costs incurred as a result of
    these delays also identified the dollar amounts compensated in
    fiscal years 1997-98. These amounts ranged from $7,855 to $8
    million per state and totaled $15.4 million for the 11 states.
    States' Use of      The states identified technologies used in
    locating and identifying utilities Available           during the
    design process to facilitate utility relocations. Technologies
* Computer-aided design and drafting (CADD) systems use computer
    graphics technologies to design and map construction projects and
    presents an expedient way to consolidate many different design
    aspects, such as rights-of-way maps, into a common database, or
    base map. Forty-three, or about 84 percent, of the respondents to
    our questionnaire said that they had used CADD on more than half
    of their projects. * Vacuum extraction, which removes dirt and
    debris from test holes with a vacuum, is one of the more accurate
    methods for the nondestructive location of underground utilities.
    Seven states used it on more than half of their projects. *
    Geographic information/global positioning systems are used for
    mapping purposes. Geographic information systems use software and
    hardware to develop an information database using coordinates of
    various land features and mapping techniques. Global positioning
    systems represent a newer method of providing ground control
    points for mapping purposes by monitoring satellite signals; on-
    ground receivers pick up the satellite information, which is then
    transferred to an attached computer. Fifteen states reported they
    had used these systems on more than half of their projects. *
    Subsurface utility engineering is used to incorporate new and
    existing technologies to identify and map underground utilities
    during the early development of a highway project. This
    engineering process might include using vacuum extraction to help
    locate utilities and CADD or geographic information systems for
    information management and mapping activities critical to the
    design process. Having such information early in the design
    process offers project designers the ability to redesign the
    project or avoid existing utilities. Seven states reported that
    they had used SUE on more than half of their projects. Page 15
    GAO/RCED-99-131 Utility Relocations B-280707 The states that
    reported that they had used these various technologies on more
    than half of their projects in the design phase during fiscal
    years 1997-98 are shown in figure 4. Page 16
    GAO/RCED-99-131 Utility Relocations B-280707 Figure 4: States'
    Responses Regarding Use of Selected Technologies on More Than Half
    of Their Projects, Fiscal Years 1997-98 CADD CADD    CADD GPS
    GPS CADD CADD
    CADD
    CADD GPS
    GPS GPS
    CADD             SUE CADD                              CADD
    CADD                                     GPS               VE GPS
    CADD                                        SUE CADD
    CADD                    CADD GPS
    GPS CADD
    CADD CADD SUE GPS
    CADD CADD                                           CADD CADD
    VE VE CADD GPS
    CADD CADD                                CADD
    SUE VE
    CADD               SUE                    CADD CADD
    GPS GPS                 VE VE                       SUE SUE
    CADD                            CADD                 CADD VE CADD
    CADD                              CADD CADD    CADD      GPS GPS
    CADD CADD                   CADD CADD CADD CADD CADD    CADD VE
    Vacuum extraction GPS     Geographic Information/Global
    Positioning Systems SUE     SUE Source: States' responses to GAO's
    questionnaire. Page 17
    GAO/RCED-99-131 Utility Relocations B-280707 Because we were
    specifically asked to examine SUE, we took a closer look at its
    use among the states. FHWA has recommended the use of SUE to
    accurately identify, characterize, and map underground utilities
    during the design phase of a highway or bridge project. In April
    1997, FHWA reported several case studies to illustrate the cost
    savings or cost avoidances that can result from using SUE.6 For
    example, Virginia made design adjustments to a major highway
    project and eliminated 61 of 75 potential utility conflicts with
    construction. By making the design changes, Virginia reported that
    utility relocation work estimated to cost $731,425 was avoided.
    With the cost of the project's SUE activities totaling $93,553, a
    net savings of $637,872 was reported. In another case, using SUE
    technology enabled Maryland to redesign a project and thus reduce
    the length of gas, water, and sewage lines needing relocation from
    5,000 to about 400 feet for each utility. SUE activities cost the
    project about $56,000, but Maryland reported that the state and
    the utilities avoided over $1.3 million in relocation costs that
    they otherwise would have incurred. Still another example was a
    project in North Carolina, where vacuum extraction technology was
    used in conjunction with SUE to precisely identify the location of
    a water line running alongside 18 miles of roadway. According to
    North Carolina, the process, costing about $10,000, resulted in
    identifying approximately 4 miles of the water line that could
    remain in place, thus helping the state and the utility company
    avoid about $500,000 in relocation costs. We examined whether the
    states using SUE on more than half of their projects performed
    better than the rest of the states in terms of having fewer
    projects involving utility relocations, having less costly
    projects, or having fewer delays caused by utility relocations.
    Five of the seven states that indicated they used SUE on more than
    half of their projects also included information on the numbers
    and costs of advertised projects, and the delays of completed
    projects, which we used to compare with similar information
    provided by many of the 32 states that reported that they were not
    using SUE to any great extent. The results of our comparisons were
    inconclusive. For the small number of states using SUE, we got
    mixed results with respect to whether the use of SUE directly
    affected the number of utility relocations, their costs, and any
    associated delays. These results 6Subsurface Utility Engineering,
    Federal-Aid and Design Division, Office of Engineering, Federal
    Highway Administration (Apr. 1997). Page 18
    GAO/RCED-99-131 Utility Relocations B-280707 indicated that other
    factors may be affecting the extent of utility relocations and the
    extent of the delays caused by utility relocations.7 Under a July
    1997 contract with FHWA, Purdue University is currently conducting
    a 2 1/2-year study to determine the effectiveness of SUE on
    reducing costs and delays on highway projects. This study is
    examining the use of SUE in North Carolina, Ohio, Oregon, Texas,
    Virginia, Wyoming, and Puerto Rico. A final report is due in late
    1999. Mitigation Methods                      Incentives,
    penalties, and/or the courts were infrequently used to Used
    encourage or compel utility companies to relocate utilities for
    federal-aid highway and bridge projects in a timely manner. Forty-
    one states used early planning and coordination, and 33 states
    used special contracting methods to help mitigate or ameliorate
    the impact of relocating utilities. Table 2 shows the number of
    states that reported that they used these mitigation methods or
    measures in fiscal years 1997-98. Table 2: States' Responses
    Regarding Mitigation Methods Used by States,      Mitigation
    method
    Number of states Fiscal Years 1997-98                    Monetary
    incentives
    3 Monetary penalties
    7 Courts
    2 Early planning and coordination
    41 Special contracting methods
    33 Source: States' responses to GAO's questionnaire. Use of
    Incentives                       Although three states provided
    monetary incentives to encourage utility companies to complete
    utility relocations on federal-aid highway and bridge projects,
    none of these incentives were contingent on the timely completion
    of the relocation work. For example, Delaware noted that it paid
    one of its construction contractors to perform the utility trench
    excavation for one utility relocation project. The second state,
    Missouri, stated that it pays utility companies for the state's
    share of relocation costs 7States' identified the extent to which
    they used SUE on the basis of the projects in the design phase
    during fiscal years 1997-98. Our comparisons would be affected if
    the states significantly altered their use of SUE for projects
    advertised or completed during fiscal years 1997-98. Page 19
    GAO/RCED-99-131 Utility Relocations B-280707 before the utilities
    begin work, subject to a final audit. Lastly, Massachusetts
    pointed out that it reimburses utilities for 100 percent of the
    costs of relocating utilities on bridge replacement projects.
    Under the provisions of this program, Massachusetts makes the
    reimbursements contingent on the utilities' completing the
    relocation work on time. For each day that the utility falls
    behind schedule, the state reduces the amount being reimbursed. If
    relocating the utilities causes a contractor to incur a delay that
    results in a claim, the cost of the claim would also be deducted
    from the moneys due the utility. Although these provisions to
    reduce payments for delays incurred are written into project
    agreements, a Massachusetts highway official told us that these
    provisions have never been used. Use of Penalties    Seven states
    responded that they had assessed monetary penalties against
    utilities that failed to complete utility relocations on federal-
    aid highway and bridge projects in a timely manner. These states
    either charged the utilities for the costs that the states
    incurred or for contractor claims paid as a result of delays in
    relocating utilities. These penalties were not directly tied to
    missed agreed-upon utility relocation dates but were assessed on a
    case-by-case basis. In 1998, the state of Rhode Island, which pays
    for all of the costs of relocating utilities on federal-aid
    highway and bridge projects, considered legislation that would
    have required utilities to relocate their facilities within 30
    days of receiving notice. If utilities were not relocated within
    that time, Rhode Island's department of transportation would have
    been permitted to contract for the relocation with a private
    company, and the utility company would had to have paid for the
    cost of the contract. The utilities successfully argued that
    having them pay for the relocations would increase the cost to
    their utilities' customers, and the proposed legislation was not
    enacted. Use of Courts       The courts are seldom used to
    discipline utility companies for untimely utility relocations.
    Only two states reported using the courts over the past 2 years.
    Kentucky responded that it had used the courts very infrequently,
    and Texas responded that it had used the courts on only one
    occasion. Officials from Maryland, which has not used the courts,
    questioned whether the state could be successful in court because
    it would be difficult to show that the utility was at fault. The
    officials said that the state would need to demonstrate that (1)
    it or the construction contractor had notified the utility company
    in a timely manner of the work to be done and (2) the utility had
    not been kept from doing its relocation work. An Page 20
    GAO/RCED-99-131 Utility Relocations B-280707 official from Maine
    pointed out that his state works closely with utility companies to
    resolve problems and conflicts. He expressed concern that
    litigation would jeopardize the positive working relationship that
    exists between the Maine department of transportation and the
    utilities. Officials in several of the states we visited echoed
    this comment. Early Planning and              Forty-one states
    responded that they used early planning and coordination
    Coordination                    methods to help avoid or reduce
    delays in relocating utilities and their impacts on highway and
    bridge projects. For example, various states were * providing much
    earlier-in some instances 5-year-notices of upcoming projects; *
    inviting utility companies to meetings early in the design phase
    of a project; * holding monthly, quarterly, or other periodic
    planning/coordination meetings; * providing advanced rights-of-way
    and utility relocation funding before the highway and/or bridge
    construction work was funded; and * improving coordination efforts
    and working relationships. Illustrative of some of the actions
    being taken by states to deal with utility relocation concerns,
    the Texas department of transportation recently developed and
    adopted what it calls its Utility Cooperative Management Process.
    This process was put together as a means of discovering and
    incorporating utilities' concerns into the planning, design,
    acquisition, and construction phases of project development. Texas
    recognized, as have many other states, that early coordination
    provides for more efficient highway design, economical utility
    relocation, and reduced construction costs. Texas's goal is to (1)
    accommodate utilities during the planning and design phase and (2)
    when utility adjustments are necessary, implement an adjustment
    plan that is compatible with the state's established contract
    award scheduling and construction sequencing. Use of Special
    Contracting      States are using special contracting methods to
    help mitigate relocation Methods                         delays.
    One way of reducing conflicts between construction work and
    relocation work is to include the relocation work in the
    construction contracts; thus, giving the construction contractor
    more control over all the work. Fifteen states-Alabama, Alaska,
    Colorado, Delaware, Georgia, Kentucky, Louisiana, Maine, Maryland,
    Missouri, Montana, New Hampshire, North Carolina, Ohio, and South
    Carolina-have included Page 21
    GAO/RCED-99-131 Utility Relocations B-280707 utility relocation
    work, such as that for water and sewer lines, directly in
    construction contracts for certain projects. Another contracting
    method used by nine states-Louisiana, Maine, Maryland,
    Mississippi, Missouri, North Carolina, Ohio, Oregon, and Rhode
    Island-is to separately contract the site clearing and preparation
    work and allow utility companies the time to relocate their lines
    and facilities before the state advertises the highway
    construction project. A state transportation official told us,
    however, that such a phased approach can generally extend the
    length of each job. Some representatives of utility companies told
    us that they are reluctant to relocate utilities too soon (e.g.,
    before a construction project starts) because of the possibility
    of subsequent project redesigns and the need for them to come back
    and redo what they have already done. Partnering is still another
    mitigation method mentioned by 11 states-Alaska, Connecticut,
    Delaware, Indiana, Kansas, Kentucky, Maine, Massachusetts,
    Michigan, Nebraska, and Texas. This method, which is advocated by
    at least one national contractor association, seeks to remove the
    adversarial relationships that sometimes exist between states,
    contractors, and utility companies and replace them with business
    relationships that are based on common goals and a desire to work
    productively together.8 According to the contractor association,
    partnering does not change nor release any of the contractual
    requirements but helps all parties recognize that a basic tenet of
    contract law is to act in good faith. A Massachusetts highway
    official explained that partnering has been used on large
    projects. State, contractor, and utility company officials
    involved in the project meet weekly or biweekly to discuss all
    issues and resolve problems. This official said that partnering
    helps improve communications and reduce delays but that it does
    not resolve all delay problems. He explained that when conflicting
    demands for a utility company's resources arise, relocating
    utilities may receive a lower priority by the utility company
    because it entails expending resources as opposed to doing
    something that generates income. Contracts associated with very
    large federal-aid highway and bridge projects sometimes contain
    unique features involving utility relocations because of the
    magnitude of the relocation work. For example, the ongoing
    Interstate-15 Project in Salt Lake City, Utah, is a multi-billion-
    dollar, 17-mile project that involves the relocation of the lines
    and facilities of about 45 utility companies and must be completed
    in time 8See Partnering: A Concept for Success, The Associated
    General Contractors of America (Oct. 1991). Page 22
    GAO/RCED-99-131 Utility Relocations B-280707 for the 2002 Winter
    Olympic Games. As a means of facilitating the relocation of
    utilities on this time-critical project, agreements were reached
    whereby the relocation work of all but one of the utilities is
    being done by the construction contractor. The electric utility
    company is the only holdout, preferring to remain in charge of its
    relocation work. Performing the utility relocation work gives the
    contractor more control over this work, thus reducing the
    coordinating and work-sequencing problems that might otherwise
    arise. Another example of a very large highway and bridge project
    is the $10.8 billion Central Artery/Tunnel Project in Boston,
    Massachusetts. This project involves hundreds of miles of gas,
    electric, sewer, telephone, and other utility lines and facilities
    that needed to be moved out of the path of the new highway. At the
    time of our visit to the project in September 1998, the utility
    work was more than 80-percent complete. Project officials
    attributed the success they had in relocating the utilities to
    their ability to (1) obtain utility companies' involvement from
    the start and throughout the design process; (2) require
    construction contractors to build the ducts and conduits and the
    utilities to perform the hookups, such as cutting and splicing
    cables; (3) enhance project coordination by having each utility
    provide an employee liaison; and (4) use SUE early in the design
    process. Project officials estimated that the costs of relocating
    utilities for the Central Artery/Tunnel Project will total about
    $1 billion, including about $150 million that represents
    reimbursements to the various utilities for their relocation
    costs. Observations    The relocation of utility lines and
    facilities is an integral part of many highway and bridge
    construction projects. Project construction is often delayed when
    utilities are not relocated in a timely manner for the
    construction work to proceed. There is no one solution to this
    problem. Each highway or bridge project is different, with its own
    set of circumstances, and must be dealt with accordingly by those
    involved in the project. The highway and bridge projects that have
    proceeded most smoothly are those that involved a lot of
    coordination, cooperation, and communication between the various
    project participants early in the project's design and throughout
    the project. However, delays in relocating utilities may become
    even more pronounced in the future. Increased funding provided
    under TEA-21 for highway and bridge construction currently and in
    the years ahead is expected to result in increased (1) numbers of
    ongoing highway and bridge construction projects and (2) demands
    on the resources of state transportation departments, Page 23
    GAO/RCED-99-131 Utility Relocations B-280707 construction
    contractors, and utility companies. Because the resources
    available for utility relocation work are already stretched thin,
    utility relocation delays will continue to demand attention by all
    project participants. Agency Comments    We provided the
    Department of Transportation with a draft of this report for
    review and comment. The Department generally agreed that the facts
    have been accurately and fairly presented in the report. Scope and
    To assess the impact that delays in relocating utilities are
    having on the Methodology        delivery and cost of federal-aid
    highway and bridge projects, we conducted various literature
    searches. We met with officials from FHWA headquarters, the
    American Society of Civil Engineers, and several subsurface
    utility engineering companies. We visited nine states and met with
    officials from FHWA, state departments of transportation, and
    construction and utility companies. We visited Delaware, Maryland,
    North Carolina, and Virginia because of their proximity to
    Washington, D.C. We visited Connecticut because construction
    contractors in the state brought the issue of utility relocations
    to Congress's attention. Massachusetts and Utah were selected
    because of the large highway project going on in each statethe
    Central Artery/Tunnel Project in Massachusetts and the I-15
    Project in Utah. Both are large-dollar projects involving
    extensive utility relocations. Rhode Island was selected because
    its state legislature recently considered a bill that would impose
    a penalty on utility companies that failed to relocate their
    utilities within 30 days. Texas was selected because several
    officials we met with mentioned its utility relocation activities.
    We also met with representatives of the Connecticut Road Builders
    Association, Construction Industries of Massachusetts,
    Construction Industries of Rhode Island, the Associated General
    Contractors of America, and Bell Communications Research. We
    contacted, by telephone, officials from the Baltimore City Public
    Works, Maryland Public Service Commission, Electric Power Research
    Institute, and American Road and Transportation Builders
    Association. We attended a forum on utility relocation delays
    hosted in July 1998 by the Construction Automation & Robotics
    Laboratory, North Carolina State University; a national utility
    relocation conference held in Louisville, Kentucky, in October
    1998; and a Utility/Contractor Forum hosted in October 1998 by the
    Connecticut department of transportation. Page 24
    GAO/RCED-99-131 Utility Relocations B-280707 Finally, on the basis
    of information we obtained through the above efforts, we prepared
    a questionnaire and mailed it to the highway departments of each
    of the 50 states and the District of Columbia. We received
    responses from all 50 states and the District of Columbia, which
    we summarized and analyzed. The responses provided us with general
    information regarding the extent, causes, and impacts of delays
    caused by relocating utilities in each of the states and some
    information on how each state is responding to the problem. We
    performed our work from July 1998 through May 1999 in accordance
    with generally accepted government auditing standards. We are
    sending copies of this report to the Honorable Rodney E. Slater,
    Secretary of Transportation; Kenneth R. Wykle, Administrator,
    Federal Highway Administration; the Honorable Jacob J. Lew,
    Director, Office of Management and Budget; state departments of
    transportation; interested congressional committees; and other
    interested parties. We will send copies to other interested
    parties upon request. Major contributors to this report are listed
    in appendix II. Phyllis F. Scheinberg Associate Director,
    Transportation Issues Page 25
    GAO/RCED-99-131 Utility Relocations Contents Letter
    1 Appendix I
    28 Summary of States' Responses to GAO's Questionnaire Appendix II
    35 Major Contributors to This Report Tables
    Table 1: States' Responses Identifying Reasons for Delays in
    8 Relocating Utilities Table 2: States' Responses Regarding
    Mitigation Methods Used                   19 by States, Fiscal
    Years 1997-98 Figures                  Figure 1: States' Responses
    Regarding Percentages of Federal-Aid                 6 Projects
    Involving Utility Relocations That Were Delayed, Fiscal Years
    1997-98 Figure 2: States Reporting Great or Very Great Impacts
    From                     11 Delays Caused by Relocating Utilities,
    Fiscal Years 1997-98 Figure 3: States' Responses Concerning
    Compensation of                          14 Contractors for Delays
    Caused by Relocating Utilities, Fiscal Years 1997-98 Figure 4:
    States' Responses Regarding Use of Selected
    17 Technologies on More Than Half of Their Projects, Fiscal Years
    1997-98 Abbreviations CADD          computer-aided design and
    drafting (system) FHWA          Federal Highway Administration GAO
    General Accounting Office SUE           subsurface utility
    engineering TEA-21        Transportation Equity Act for the
    21stCentury Page 26
    GAO/RCED-99-131 Utility Relocations Page 27      GAO/RCED-99-131
    Utility Relocations Appendix I Summary of States' Responses to
    GAO's Questionnaire Page 28       GAO/RCED-99-131 Utility
    Relocations Appendix I Summary of States' Responses to GAO's
    Questionnaire Page 29                                  GAO/RCED-
    99-131 Utility Relocations Appendix I Summary of States' Responses
    to GAO's Questionnaire Page 30
    GAO/RCED-99-131 Utility Relocations Appendix I Summary of States'
    Responses to GAO's Questionnaire Page 31
    GAO/RCED-99-131 Utility Relocations Appendix I Summary of States'
    Responses to GAO's Questionnaire Page 32
    GAO/RCED-99-131 Utility Relocations Appendix I Summary of States'
    Responses to GAO's Questionnaire Page 33
    GAO/RCED-99-131 Utility Relocations Appendix I Summary of States'
    Responses to GAO's Questionnaire Page 34
    GAO/RCED-99-131 Utility Relocations Appendix II Major Contributors
    to This Report Resources,               Sumikatsu J. Arima
    Community, and           Paul D. Lacey Ralph W. Lamoreaux Economic
    Luann M. Moy Development              Earl P. Williams, Jr.
    Division, Washington, D.C. Office of the General    Helen T.
    Desaulniers Counsel, Washington, D.C. (348097)
    Page 35                  GAO/RCED-99-131 Utility Relocations
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